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RealTime Economic Issues Watch

In RealTime posts, PIIE senior staff and colleagues discuss the fast-moving economic news, financial developments, and public policy choices confronting the United States and the world.

Recent Posts

The Taper Tantrum Revisited

by and Kevin Stahler | March 25th, 2015 | 01:12 pm

It has been almost two years since the great “taper tantrum.” In June 2013, financial markets interpreted statements by the chairman of the Federal Reserve Ben Bernanke as suggesting that a tighter monetary policy was in the offing when that was apparently not his intention. Thinking the “taper” of the Fed’s bond purchasing program, known […]

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We Are Unsatisfied Most of the Time

by Jan Zilinsky | March 25th, 2015 | 09:35 am

Pew Research public opinion surveys from 2007 to 2014 reveal that a majority of citizens in most countries are generally unsatisfied with the way things are going most of the time.1 About 30 percent of respondents in 48 countries reported being satisfied on average over the 8-year period (figure 1). Only in 12 percent of […]

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Farewell to the Federal Corporate Income Tax: Part II

by Tyler Moran | March 24th, 2015 | 10:44 am

The first part of this blog post summarized reasons for the survival of the corporate income tax, despite its multiple defects, and explained the forces leading to its slow demise. This second part reviews the US Treasury’s response to foreign tax competition, one of the forces eroding the corporate tax structure.

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Farewell to the Federal Corporate Income Tax: Part I

by and Tyler Moran | March 20th, 2015 | 02:39 pm

The federal corporate income tax was ill-conceived when enacted in 1909, and its negative effects have grown worse with age. It penalizes the most successful firms, discourages productive investment, drives US corporations to foreign soil, and is overly complex to administer.

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The Incredibly Rosy Forecast of Russia’s Central Bank

by | March 19th, 2015 | 03:19 pm

The Central Bank of Russia has published its 3-year forecast for economic growth in 2015–17. The forecast, released on March 14, is so overly optimistic that three comments are in order.

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Egypt’s Mixed Messages

by | March 17th, 2015 | 06:07 pm

“Egypt is open for business” was the message of an economic development conference in Sharm el-Sheikh held the weekend of March 14–15. To his credit, President Abdel Fattah el-Sisi got this message across, and the government claims to have attracted $36 billion in foreign investment. But the investment is almost entirely energy, infrastructure, and aid, […]

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The Reserve Bank of India Should Be More Relaxed about Rupee Strength

by | March 16th, 2015 | 01:24 pm

Since October of last year the euro has slumped almost 20 percent versus the dollar as expectations of monetary tightening in the United States and loosening by the European Central Bank (ECB) have taken hold. In the past a strong dollar and rising US interest rates have been associated with emerging-market currency crises. The collapse […]

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Greece and the Euro Area—Impasse or End Game?

by | March 13th, 2015 | 11:02 am

Another week has passed in the tug of war between Greece and the euro area, and a wide gap remains between the two sides over what Athens must do to renew the financial lifeline that has kept it solvent since 2010. Still, it is too early to dismiss the likelihood of a deal in coming […]

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Don’t Waste the ECB’s Gift to Finance and Budget Ministers

by | March 13th, 2015 | 08:41 am

The long-awaited start of the European Central Bank’s (ECB) program of quantitative easing (the purchase of bonds) and the ensuing collapse of government bond yields throughout the euro area and beyond have given finance and budget ministers flexibility this fiscal year and the next. Since last summer, when budgets were being prepared, bond yields have […]

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Hungary under Orban: Back to State Banks

by | March 12th, 2015 | 09:32 am

Prime Minister Viktor Orban of Hungary, who took office in 2010, has embarked in the last few years on a policy of increasing the role of state-owned banks. The stated purpose has been to reduce the dependence of the Hungarian economy on foreign banks. But while solving one issue, Orban is creating another, potentially bigger […]

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